How to Start Investing in European ETFs: A Step-by-Step Beginner’s Tutorial (EUR Focus)

A hotter-than-expected inflation report jolted markets on Monday, sending stocks lower and pushing Treasury yields to fresh highs. Investors digested the implications for Federal Reserve policy as the September meeting approached, with risk assets under pressure across the board. ## Equities Stumble After CPI Print The **S&P 500** dropped sharply, ending the session at **4,480**, down **1.4%**. The **Nasdaq Composite** felt the brunt of the selling, sliding **1.9%** to close at **14,380**. The **Dow Jones Industrial Average** held up slightly better but still declined **1.1%** to **35,090**. The selloff began after the latest Consumer Price Index showed annual inflation running at **3.5%**, above the consensus forecast of 3.2%. Core inflation, which strips out volatile food and energy prices, also surprised to the upside at **3.8%**. The data fueled concerns that the Federal Reserve may need to extend its higher-for-longer stance on interest rates, prompting a broad risk-off move. ## Bond Yields Surge on Rate Hike Bets U.S. government bonds sold off in the wake of the inflation print. The yield on the **10-year Treasury** jumped to **4.45%**, up from 4.32% on Friday—a level not seen since late 2023. The **2-year yield** climbed to **4.82%**, reflecting expectations for tighter Fed policy ahead. Traders repriced the odds of a rate hike at the Fed’s September meeting, now seeing a **40%** chance of an increase versus just 18% a week ago. The move rattled equity markets and put pressure on rate-sensitive sectors. ## Commodities: Oil Extends Gains, Gold Slips Energy prices continued their upward march. **WTI crude oil** settled at **$92.70 per barrel**, rising **2.1%** on renewed supply concerns and higher demand forecasts. This marks the highest close since October 2023, stoking inflationary pressures globally. For more on the drivers behind the rally, see our deep dive on the 2026 energy price surge. **Gold** slipped to **$1,898 an ounce**, down **0.7%** as higher yields and a firmer dollar weighed on demand for the safe-haven asset. ## FX Markets: Dollar Rallies as Euro Sinks The **U.S. Dollar Index (DXY)** climbed to **107.5**, its highest level in nearly a year, as investors sought safety and priced in a more hawkish Fed. The **euro** fell to **1.0590** against the dollar, pressured by widening interest rate differentials and ongoing economic uncertainty in the eurozone. ## Key Movers: Tech and Consumer Discretionary Hit Hard Big tech names led the decline on Wall Street. **Apple (AAPL)** dropped **2.4%**, while **Microsoft (MSFT)** sank **2.1%**, as higher yields raised concerns about future growth and discounted the value of long-duration earnings. Consumer discretionary stocks also lagged, with **Tesla (TSLA)** falling **3.5%** after the company announced modest delivery growth for the quarter. Energy stocks bucked the trend, with **ExxonMobil (XOM)** and **Chevron (CVX)** both notching gains of over **1.5%** on the back of climbing oil prices. Financials showed relative strength, as banks tend to benefit from higher interest rates. **JPMorgan Chase (JPM)** edged up **0.6%**. ## What to Watch All eyes turn to the Federal Reserve’s policy meeting next week, where officials will weigh the latest inflation data and signal their rate path for the rest of the year. Markets will also parse new economic projections and Chair Powell’s press conference for clues on the Fed’s reaction function. Investors are monitoring upcoming retail sales and industrial production figures for fresh insight into consumer resilience and economic momentum. Meanwhile, the energy rally remains a focal point, with further supply updates and OPEC commentary on tap. For those seeking yield and stability amid market volatility, our guide to European money market ETFs offers a timely resource. With inflation surprising to the upside and yields breaking higher, volatility is likely to persist as the market digests the Fed’s next move. Stay tuned for more updates as this pivotal week in markets unfolds.